2020 Capital Markets Fact Book - Sifma

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Introduction2020 Capital Markets Fact BookSeptember 20202020 Capital Markets Fact BookPage 1

IntroductionContentsIntroduction. 6Capital Markets Fuel Economies . 6US Capital Markets Are the Largest in the World . 7Highlights. 8US Capital Markets . 8Global Capital Markets . 8Investor Participation . 9Savings & Investment . 9US Securities Industry . 9US Capital Markets . 10US Corporate Capital Raised Initial Public Offerings - Charts . 10US Corporate Issuance, Fixed Income – Value. 11US Corporate Issuance, Fixed Income – Number of Issues . 12US Corporate Issuance, Equity – Value . 13US Corporate Issuance, Equity – Number of Issues . 14US Private Placements – Value . 15US Private Placements – Number of Issues. 16US Long-Term Municipal Bond Issuance – Value . 17US Long-Term Municipal Bond Issuance – Number of Issues . 18US Long-Term Municipal Bond Issuance – Number of Issuers . 19Bank Qualified US Municipal Bond Issuance . 20US Equity and Debt Outstanding. 21US Stock Market Capitalization . 22US Stock Market Indices . 23US Interest Rates and Bond Yields . 24US Mergers and Acquisitions – Announced and Completed . 25US Bond Market Average Daily Trading Volume. 26Municipal Bond Average Daily Trading – Dollar Volume . 27Municipal Bond Average Daily Trading – Number of Trades . 28US Equity Markets Average Daily Trading Volume – Charts . 29Trading Activity of NYSE- and NASDAQ-listed Stocks . 30Futures Contracts Traded on US Exchanges . 31Options Contracts Traded on US Exchanges . 32US Mutual Fund Assets . 332020 Capital Markets Fact BookPage 2

IntroductionUS Mutual Fund Net New Cash Flow . 34Net Assets and Number of Exchange-Traded Funds (ETFs) - Chart . 35Global Capital Markets . 36Global Bond and Equity Issuance - Charts . 36Global Long-Term Bond Issuance . 37Global Equity Issuance . 38International Security Offerings by All Issuers - Market Value . 39International Security Offerings by All Issuers - Number of Issues . 40International Security Offerings by US Issuers - Market Value . 41International Security Offerings by US Issuers - Number of Issues . 42Global Bond Market Outstanding and Global Equity Market Capitalization - Charts . 43Global Bond Market Outstanding - Value . 44Global Bond Market Outstanding - Share of Total . 45Global Equity Markets Capitalization - Market Value. 46Global Equity Markets Capitalization - Share of Total . 47Global Derivatives Market Outstanding - Notional Principal . 48Global Investment Banking Net Revenues by Product - Charts . 49Global Investment Banking Net Revenues by Region . 50Global Mergers and Acquisitions – Announced and Completed. 51US Holdings of Foreign Securities. 52US Gross Activity in Foreign Securities . 53US Net Purchases of Foreign Securities . 54US Gross Activity in Foreign Equities by Region/Country . 55US Net Purchases of Foreign Equities by Region/Country. 56Foreign Holdings of US Securities. 57Foreign Gross Activity in US Securities . 58Foreign Net Purchases of US Securities . 59Foreign Gross Activity in US Equities by Region/Country . 60Foreign Net Purchases of US Equities by Region/Country. 61Major Global Stock Market Indexes . 62Foreign Exchange Rates . 63American Depositary Receipts (ADRs) . 64US Investor Participation . 65US Holdings of Equities – Market Value . 65US Family Holdings of Stock . 66US Household Equity Ownership . 67US Household Liquid Financial Assets - Market Value . 682020 Capital Markets Fact BookPage 3

IntroductionUS Household Liquid Financial Assets - Share of Total . 69US Holdings of Equities by Type of Holder - Market Value . 70US Holdings of Equities by Type of Holder - Share of Total . 71US Net Acquisitions of Corporate Equities by Type of Holder . 72Savings & Investment . 73US Retirement Assets . 73US Private Pension Funds Assets. 74US Private Pension Fund Assets Investment Mix . 75US Defined Benefit Plan Asset Investment Mix . 76US Defined Contribution Plan Asset Investment Mix. 77US Individual Retirement Account (IRA) Assets . 78US Individual Retirement Account (IRA) Assets . 79Household Saving Rates of Major Nations . 80US Economic Indicators . 81US Federal Receipts, Outlays, Deficit and Debt . 82Securities Industry . 83FINRA-Registered Broker-Dealers Financial Results . 83FINRA-Registered Firms and Registered Representative - Charts . 84NYSE Member Firms Aggregate Financial Results . 85NYSE Member Firms Aggregate Total Capital and Equity Capital - Charts . 86US Securities Industry Employment . 87US Investment Banking Net Revenues by Product - Charts. 88FINRA-Registered Broker-Dealers by State - Map . 89FINRA-Registered Representatives by State - Map . 90SEC- and State-Registered Investment Advisors by State - Map. 91Authors . 922020 Capital Markets Fact BookPage 4

IntroductionAssociated ReportsPlease also see other SIFMA Research publications, which can be found at: https://www.sifma.org/ researchSIFMA Insights Primers: The SIFMA Insights primer series is a reference tool that goes beyond a typical 101 series. Byillustrating important technical and regulatory nuances, SIFMA Insights primers provide a fundamental understanding of themarketplace and set the scene to address complex issues arising in today’s markets. The SIFMA Insights market structureprimer series includes: global capital markets & financial institutions; U.S. fixed income markets; U.S. equity markets; U.S. multilisted options markets; U.S. ETF markets; and U.S. capital formation and listings exchanges. The primers and other Insightsreports can be found at: https://www.sifma.org/primersSIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. Onbehalf of our industry’s nearly 1 million employees, we advocate on legislation, regulation and business policy, affecting retail and institutional investors,equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets,informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professionaldevelopment. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).For more information, visit http://www.sifma.org.This report is subject to the Terms of Use applicable to SIFMA’s website, available at http://www.sifma.org/legal. Copyright 20202020 Capital Markets Fact BookPage 5

IntroductionIntroductionCapital markets recognize and drive capital to the best ideas and enterprises. Coupled with the free flow of capital,innovation is an integral component to a country for supporting job creation, economic development and prosperity.Markets facilitate the transfer of funds from those who seek a return on their assets to those who need capital andcredit to expand.Clients benefiting from healthy capital markets include not just individual investors but also institutional investors,governments and corporations. Capital, raised through equity and debt, can be used to grow businesses, financeinvestments in new plant, equipment and technology and fund infrastructure projects. This creates jobs and flowsmoney into the economy. Additionally, individuals and businesses can invest in securities to generate wealth.Capital Markets Fuel EconomiesIn the U.S., capital markets provided 72% of funding for economic activity, in terms of equity and debt financing ofnon-financial corporations. Capital markets enable debt issuance, which is a more efficient, stable and lessrestrictive form of borrowing for corporations. The use of debt capital markets to fuel economic growth is moreprevalent in the U.S, at 79% of the total, whereas bank lending is more dominant in other regions, around 21% onaverage.On the equities side, companies need capital for various business purposes – to invest in growth, fund mergers andacquisitions, etc. – and firms have several ways they can generate capital, including issuing IPOs. IPOs allowbusinesses to grow, innovate and better serve their customers.In short, U.S. capital markets are the bedrock of our nation’s economy.Debt Financing of Non-Financial CorporationsFinancing of Non-Financial .5%14.4%USEuro panChina79.4%30%20%10%0%USSource: OECD, Federal Reserve, ECB, Bank of Japan, National Bureau of Statistics of ChinaNote: As of 2019, EU 2018, China 2016; Euro Area 19 EU-member states using the Euro; other financing (ex-China) insurance reserves, trade credits andtrade advances; other financing (China) other, direct investments; economic activity defined as financing of non-financial corporations; EU 27 EU-memberstates; DCM debt capital markets corporate bonds only2020 Capital Markets Fact BookPage 6

IntroductionUS Capital Markets Are the Largest in the WorldThe U.S. capital markets are largest in the world and continue to be among the deepest, most liquid and mostefficient.Equities: U.S. equity markets represent 39.4% of the 95.0 trillion in global equity market cap, or 37.5 trillion; thisis 3.9x the next largest market, the EU (excluding the U.K.).Global Equity MarketCapitalization2019 - 95 TrillionEM21%US39%OtherDM19%Japan7% UK4%EU 2710%Source: World Federation of Exchanges, SIFMA estimatesNote: For listed domestic companies; EM emerging markets, DM developed marketsFixed Income: U.S. fixed income markets comprise 38.9% of the 105.9 trillion securities outstanding across theglobe, or 41.2 trillion; this is 1.9x the next largest market, the EU (excluding the U.K.).Global Bond Market Outstanding2019 - 105.9 TrillionEM16%OtherDM6%US39%Japan12%UK6%EU 2721%Source: Bank for International Settlements, SIFMA estimatesNote: EM emerging markets, DM developed markets2020 Capital Markets Fact BookPage 7

HighlightsHighlightsUS Capital MarketsIn 2019, the securities industry raised 2.1 trillion of capital for businesses through debt and equity issuance activityin the United States, a 13.0% decrease from the previous year.Equity issuance, including common and preferred shares, totaled 228.1 billion in 2019, a 2.9% increase year-overyear. Initial public offering (IPO) volume, excluding closed-end funds, was 48.8 billion in 2019, down 2.1% from 49.9 billion in 2018. Follow-on, or secondary, issuance totaled 145.3 billion in 2019, down 6.0% from 2018.Issuance of corporate debt, asset-backed securities and non-agency mortgage-backed securities totaled 1.8 trillionin 2019, down 14.6% from 2018. Non-convertible corporate debt issuance increased by 6.2% to 1.4 trillion in 2019,while convertible corporate debt decreased 98.0% to 0.8 billion. Non-agency mortgage-backed securities issuancefell 56.7% to 116.9 billion in 2019, while asset-backed securities issuance volume fell 40.0% to 310.2 billion.U.S. long-term municipal bond issuance totaled 426.0 billion in 2019 a 22.8% increase from 346.8 billion in 2018.Of the total, 57.8% was issued in form of revenue bonds, 37.7% in general obligation bonds and the remainder inprivate placements.U.S. merger and acquisition announced deals totaled 1.9 trillion in 2019, a 5.9% increase from 1.8 trillion in 2018,while the value of completed M&A deals decreased by 8.5% to 1.7 trillion.The U.S. stock markets recorded double-digit increases in 2019: the Dow Jones Industrial Average rose by 22.3%,ending the year at 28,538.44, the Standard & Poor’s 500 Index was up 28.9% to close 2019 at 3,230.78; and theNASDAQ Composite Index increased by 35.2% to 8,972.60.In 2019, the average daily volume for NYSE-listed stocks was 137.9 billion and 3.6 billion shares, down 7.9%2.1%, respectively, year-over-year. For NASDAQ-listed stocks the average daily volume was 108.6 billion and 2.1billion shares, down 10.3% and 4.5%, respectively, year-over-year.Global Capital MarketsGlobal long-term bond market issuance increased by 19.7% to 21.0 trillion in 2019 while the global equity issuancedecreased by 0.9% to 540.5 billion.Global bond markets outstanding value increased by 5.4% to 105.9 trillion while global equity market capitalizationincreased by 23.8% year-over-year to 95.0 trillion in 2019.U.S. gross activity (purchases and sales) in foreign securities increased to 36.9 trillion in 2019, up 9.3% from 2018.Foreign gross activity in U.S. securities increased by 12.7% to 82.1 trillion in 2019.2020 Capital Markets Fact BookPage 8

HighlightsInvestor ParticipationFederal Reserve Board data showed the value of U.S households’ liquid assets increased by 16.9% to 49.5 trillionin 2019 from 42.4 trillion in 2018. Of total liquid assets held by U.S. households, 41.6% was in equities, 25.7% inbank depos-its and CDs and 17.9% in mutual funds, with the remaining 15.7% split between U.S. Treasurysecurities; agency & GSE securities; municipal bonds; money market funds; and corporate bonds.Savings & InvestmentTotal value of U.S. retirement assets increased by 10.8% to 39.0 trillion in 2019, according to Federal ReserveFlow of Funds accounts. Total pension assets rose 7.8% to 28.0 trillion while assets held in individual retirementaccounts increased by 19.2% to 11.0 trillion.US Securities IndustryThe number of FINRA-registered broker-dealers decreased by 2.5% to 3,417 in 2019.Pre-tax net income (profits) for NYSE member broker-dealers rose to 28.1 billion in 2019, up 2.8% from 27.3billion in 2018. Gross revenues totaled 250.4 billion in 2019, up 9.8% from the previous year, while total expensesrose by 10.7% to 222.3 billion.National securities industry employment, as reported by the U.S. Department of Labor, reached 971,000 jobs in2019, an increase of 0.9% from 962,200 year-over-year.2020 Capital Markets Fact BookPage 9

US Capital MarketsUS Capital MarketsUS Corporate Capital Raised Initial Public Offerings - ChartsCorporate Capital Raised in the U.S. ( 820182019Initial Public Offerings in the U.S. ( 2011201220132014201520162017Source: Bloomberg, Dealogic, RefinitivNote: Corporate capital includes underw ritten, privately placed, and medium-term notes; U.S. IPOsinclude rank eligible deals, exclude BDCs, SPACs, ETFs, CLEFs and rights offers.2020 Capital Markets Fact BookPage 10

US Capital MarketsUS Corporate Issuance, Fixed Income – Value 9.31,843.7AverageY/Y % Change5-Year CAGR10-Year 2.1%4.0%ABSNon-Agency Total FixedMBSIncomeSources: Bloomberg, RefinitivNote: Corporate debt includes public and private, investment grade and high yield bonds.2020 Capital Markets Fact BookPage 11

US Capital MarketsUS Corporate Issuance, Fixed Income – Number of IssuesCorporateDebtNumber of IssuesConvertibleNon-Agency Total 5812,5973,3342,5172,109AverageY/Y % Change5-Year CAGR10-Year %Sources: Bloomberg, RefinitivNote: Corporate debt includes public and private, investment grade and high yield bonds.2020 Capital Markets Fact BookPage 12

US Capital MarketsUS Corporate Issuance, Equity – 016201720182019AverageY/Y % Change5-Y

In the U.S., capital markets provided 72 % of funding for economic activity , in terms of equity and debt financing of non-financial corporations. Capital mar kets enable debt issuance, which is a more efficient, stable and less restrictive form of borrowing for corporations. The use of debt capital markets to fuel economic growth is more

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